MSCI’S global equities index rose slightly yesterday, eyeing a third straight day of gains, while the dollar lost ground as a US trade deal with Britain fuelled guarded optimism for US tariff negotiations with other countries including China.
While US President Trump pushed back against the idea that UK deal could be a template for other trade negotiations, traders are keenly awaiting a meeting due today in Switzerland between the US Treasury Secretary and chief trade negotiator with China’s economic tsar.
In the meantime, India yesterday offered to slash its tariff gap with the US to less than 4 per cent from nearly 13pc now, in exchange for an exemption from “current and potential” tariff hikes, Reuters reported.
MSCI’s broadest index of world shares rose 2.05 points, or 0.24pc, to 847.90 while US indexes were higher and Germany’s Dax stock index hit a record high.
Trump said yesterday that 80pc tariffs on Chinese goods “seems right” in his first suggestion of an alternative to the 145pc levies he has imposed on China.
A signal that the US is willing to make any cut on tariffs was incrementally positive, according to Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management.
“The major drivers in the market in the short term have been updates on the labor market driving Fed expectations alongside what’s happening with trade negotiations,” said Stucky.
But he said he is concerned that the market seems to be “looking through this as if there’s not going to be much economic disruption or much risk of downside occurring in the economy over the next year or so from trade disruptions.”
On Wall Street, the Dow Jones Industrial Average fell 56.51 points, or 0.14pc, to 41,311.94, the S&P 500 rose 4.61 points, or 0.08pc, to 5,668.55 and the Nasdaq Composite rose 35.78 points, or 0.20pc, to 17,963.92. The pan-European STOXX 600 index rose 0.43pc.
In currencies, the US dollar index, which measures the currency against six major peers including the euro and the yen, fell 0.37pc to 100.28.
The euro was up 0.36pc at $1.1267 while against the Japanese yen, the dollar weakened 0.58pc to145.07.
In cryptocurrencies, bitcoin eyed its fourth straight day of gains, touching its highest level since January after Thursday’s advance, which was the biggest in a month.
Bitcoin gained 0.55pc to $103,191.87 while ethereum rose 6.12pc to $2,318.17.
US Treasury yields slipped, with thinner volume than usual and sentiment still uncertain, as investors looked ahead to talks between the Trump administration and China.
The yield on benchmark US 10-year notes fell 1 basis points to 4.363pc, from 4.373pc late on Thursday. The 30-year bond yield rose 0.3 basis points to 4.8343pc.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 3.9 basis points to 3.856pc, from 3.895pc late on Thursday.
In commodities, oil prices rose yesterday and looked poised for a weekly gain with investors pinning hopes on the upcoming US/China trade talks.
US crude rose 1.35pc to $60.72 a barrel and Brent rose to $63.63 per barrel, up 1.26pc on the day.
Gold prices rose as the dollar weakened, while investors digested the remarks from Trump ahead of the weekend talks.
Spot gold rose 1.04pc to $3,339.78 an ounce. US gold futures rose 1.18pc to $3,335.50 an ounce.
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